You Are Owing Us: Innoson Sues Imo State Government Over N2.5billion Debt
- Innoson Vehicle Manufacturing Company has filed a lawsuit against the Imo government over its failure to pay a N2.54 billion debt owed to the firm
- Cornel Osigwe, head, corporate communications and affairs, Innoson Vehicles, made this known in a statement
- The statement claimed the state government had purchased various IVM vehicles and refused to make payment despite repeated demands and appeals
In a move that will surprise many Nigerians, Innoson Vehicles Manufacturing (IVM) has filed a lawsuit against the Imo state government.
the lawsuit was filed against the Imo over the state's failure to pay or service the debt of N2.5 billion.
The company in a statement said the amount was for the purchase price of the various IVM Vehicles including their parts which IVM manufactured, sold and delivered to the State Government but its government had refused and failed to pay same despite repeated demands and appeals.
Source: UGC
The statement issued by the company's Corporate Communications Head, Cornel Osigwe, stated that:
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"The lawsuit which was filed by Prof Joseph N Mbadugha, SAN, FCPA of McCarthy Mbadugha & Co, the counsel to Innoson Vehicles coming against repeated attempts made by the Chairman of Innoson Vehicles Manufacturing, Dr. Innocent Chukwuma, to the Governor urging him to pay the company on the vehicles sold, and delivered to the state government.
"For the avoidance of doubt, sometimes in April 2021, the Governor of Imo State, Senator Hope Uzodinma invited the Chairman/CEO of Innoson Vehicles, Chief Dr. Innocent Chukwuma to the Imo State Government House, Owerri where they discussed and agreed that Innoson Vehicles would sell and supply various specifications of its brand of Vehicles to the State Government which includes, inter alia;
The vehicles include:“70 units of Innoson 5-seater double cabin pick-up (IVM Carrier) 4WD, 10 units of Innoson 5-seater double cabin military pick up (IVM G12), 10 units of Innoson 5-seater single cabin military pick-up (IVM G12), 100 units of a complete siren with public addressing system, revolving light, and street police light, 2 units of IVM ambulance vehicles, 20 Units of IVM G12 MS11 and 20 sets of B. Canopy.
"The above vehicles which were valued at over N2.5 billion ($6.3M) were supplied in good faith to the Imo State Government based on an understanding with the Governor which arose after a special request that Innoson Vehicles grant the State the favor of paying for the vehicles after deliveries to them and which request was granted and honored.
"The special and privilege request granted to the Governor turned into a nightmare for Innoson Vehicles and Its Chairman after Chief Chukwuma had at various times through several visits, phone calls, messages, and submission of letters requesting payment appealed to the Governor and his conscience to make total payments or set up a payment plan that will offset the debt.
"The inability of the State Government to pay the aforesaid purchase price of the vehicles supplied has resulted in Innoson Vehicles having difficulties in fulfilling its loan repayment obligations to Keystone Bank Limited and Bank of Industry. These Banks granted their credit facilities at the rate of 10% interest and other fees therein. More so, it has led to the loss of profit arising therefrom and the accruing interest.
"It is also interesting to note that as of July 27th, 2022, the over N2.5 billion worth of vehicles supplied to Imo State Government in April 2021 which is valued at $6.3M is now worth $3.8M. Even if the money is paid today, the value of the money has depreciated by over 40 percent.
"It is therefore based on this premise that Innoson Vehicle Manufacturing Company Ltd has begun the process of recovering its debts against the Imo State Government by slamming a lawsuit of over N2.5 billion with an interest rate of 10% on the entirety of the sum claimed at the High Court of Anambra State, Nnewi Division."
Nigeria Makes The Cut as Top 4 Biggest Car Manufacturing Countries in Africa are Revealed
Meanwhile, despite Sub-Saharan Africa being the least performing region in the world regarding car manufacturing, it still has some good fundamentals.
A report by Business Insider which cited a recent report by Fitch Solutions says that Africa is the least attractive in the world in its Autos Production Risk/Reward Index (BRI), with a score of 38.4 out of a potential 100. Africa continues to greatly perform below par with an average of 50.0. Highlighting the limited rewards and risks present on the continent.
According to Insider, the report recognised profitable fundamentals that present an opportunity for the continent to grow its automobile industry and go on to become a strong player in the long run. The reasons for the underperformance include low labour costs and supportive automobile policies by governments on the continent.
Source: Legit.ng
